Michigan Court of Appeals; Docket #355589, 355596; Unpublished
Judges Gleicher, Borrello, and Ronayne Krause; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
In this unanimous, unpublished, per curiam decision, the Court of Appeals reversed the trial court’s summary disposition order dismissing Plaintiff Tyrone Rodgers’s third-party action against Defendant Champs Auto Sales, Inc. (“Champs”). The Court of Appeals held that a question of fact existed as to whether Champs was an owner of the vehicle that struck Rodgers as he crossed the street as a pedestrian.
On June 30, 2016, Donna Simmons and Tiffany Harris attempted to purchase a 2005 Dodge Magnum from Champs. They signed the purchase agreement and filed an application for Michigan title and registration on that date. Then, two days later, on July 2, 2016, Harris was driving the Magnum when she allegedly hit Rodgers, a pedestrian. At some point after the collision, Simmons took the Magnum back to Champs upon suspecting that the odometer had been tampered with prior to sale. Champs accepted Simmons’s return and issued her a refund of her deposit. Rodgers then filed a third-party negligence action against Champs, arguing that Champs retained its ownership status of the Magnum on the date of the collision because the sale of June 30, 2016 was voided ab initio upon the vehicle’s return. Champs moved for summary disposition, arguing that it was not an owner of the vehicle at the time of the collision. The trial court agreed with Champs and granted its motion,
The Court of Appeals reversed the trial court’s summary disposition order in favor of Champs, holding that there was “a question of fact regarding the circumstances of the disintegration of the sales traction, including the reason that Champs retained ownership of the Magnum and refunded the deposit.” The Court noted that car dealers are required to comply with Michigan’s odometer statute, MCL 257.233, specifically to protect buyers from fraud. Moreover, Michigan case law has established that failure to comply with the odometer statute “ ‘renders [a] transaction voidable by the purchaser.’ ” Therefore, a question of fact existed as to whether Simmons’s and Harris’s purchase was voided ab initio upon Simmons’s return of the vehicle, and whether, therefore, Champs remained an owner of the vehicle on July 2, 2016.
“The parties in this case, although generally agreeing that Simmons brought the Magnum back to Champs after the accident for a refund, dispute whether to characterize that event as a “return” or as the sales transaction being ‘voided.’ Champs argues that Simmons ‘returned’ the vehicle for a refund and that this did not result in retroactively making Champs an ‘owner’ at the time of the accident that occurred during the time between the sale and the return of the vehicle. Champs does not dispute that it accepted the return of the vehicle from Simmons. Plaintiff argues that Champs ‘voided’ the sale, allegedly because of the discrepancy involving the odometer reading of the vehicle’s mileage, and that this resulted in making the sale “void ab initio” as if the sale never existed. The evidence, when viewed in a light most favorable to plaintiff as the nonmoving party, supports plaintiff’s position.
Accordingly, there is a question of fact regarding the circumstances of the disintegration of the sales transaction, including the reason that Champs retained ownership of the Magnum and refunded the deposit. If, as is supported by the evidence viewed in a light most favorable to plaintiff, the sale was rescinded and declared void ab initio as result of fraud by Champs, then Champs remained an owner of the Magnum for purposes of the Motor Vehicle Code. Bazzi, 502 Mich at 408-409; Goins, 449 Mich at 13; Whitcraft, 148 Mich App at 54; Michigan Mut Auto Ins, 129 Mich App at 635. Perry was silent on what effect rescission of the sales contract for fraud by the dealer would have on the status of title. Because there was a genuine issue of material fact regarding whether this was the reason for undoing the sales transaction in this case, the trial court erred by granting summary disposition in favor of Champs. . . . ”